Rio Tinto slows Kitimat smelter expansion - union

TORONTO, Jan 9 (Reuters) - Rio Tinto (RIO.L) has all but halted its $2.5 billion expansion of the Kitimat aluminum smelter in British Columbia, the union which represents workers at the facility said on Friday. Rio said in December it will cut 14,000 jobs, slash capital spending and sell assets to pay down debt, and suggested that the timeline for Canadian smelter expansion projects could be affected. But union officials said that, over the past month, expansion activity at Kitimat has slowed to a trickle and that Bechtel Corp, which is the contractor for the expansion, has removed much of its equipment from the site. "They're down to a stall by the looks of it," said Rick Belmont, president of Canadian Auto Workers Local 2301. Neither Rio Tinto Alcan nor Bechtel immediately responded to calls seeking comment. Belmont said Rio has issued a statement locally saying that "the rhythm of spending" will be slower. "They don't want to come out and say that the expansion's at a halt or anything, but the proof is in the pudding. There's not a lot going on out there," he said. He said the smelter itself is continuing to operate. Rio acquired the operation when it bought Canadian aluminum producer Alcan last year. It took on tens of billions of dollars in debt that it is now struggling to pay down, following a sharp drop in aluminum prices. The expansion is expected to increase production capacity at the smelter by 40 percent to 400,000 tons per year.